The bad news is LeBron James reportedly told free agent Trevor Ariza that he was staying in Cleveland past 2010.

The good news is Ariza didn’t believe James and has an agreement in place to sign a five-year deal with the Rockets. According to ESPN’s source, James, in an attempt to recruit Ariza to the Cavaliers, told the former Knicks forward that he will re-sign with Cleveland. “Trevor asked LeBron if he would be in Cleveland after next season,” a source said. “And LeBron said, ‘I’ll be there. Of course, I’ll be there.’ “

But Ariza, who won a title with the Lakers this season, believed that James’ pitch was just a pitch and didn’t mean anything without a signed contract. In fact, ESPN reported today that James’ camp is denying that conversation took place.

Ariza can still change his mind because any deal with the Rockets cannot become official until tomorrow when free agents are permitted to sign with teams. That is also the same day James is allowed to re-sign with the Cavaliers.

The Knicks are one of many teams that will be in hot pursuit of James if he decides not to re-sign with the Cavaliers this offseason. And one would think if James had told Ariza, “I am signing with the Cavaliers this offseason,” then Ariza would be on his way to Cleveland, not Houston. We’ll find out more on that in the coming weeks.

It’s still troubling for Knicks fans to think that James would make any such proclamation and it likely means the Cavaliers are James’ first choice. But a lot can change in a calendar year and unless James signs a contract with the Cavaliers before next July 1 he is fair game to any team with the cap space to sign him — one thing the Knicks will have.

For what it’s worth, ESPN’s Ric Bucher posted on his twitter account that Ariza may be having second thoughts about signing with injury-depleted Houston.